Austin, Texas
Planning for Austin households, where pay arrives as stock.
About 85,600 Austin households earn $200,000 or more a year, and a large share of that income is paid in shares: restricted stock at Tesla, Apple and Dell, options at companies that have not gone public yet, and grants that vest on a schedule the household did not choose. Add a state pension or ORP account, a house bought near the 2022 peak, and a school district that sends hundreds of millions of its tax collections to the state each year. That is the Austin planning problem.
The situation
A city of a million people, paid in more than salary
Austin passed one million residents in 2025, the twelfth-largest city in the country, and it stretches across Travis, Williamson and Hays counties. Tesla runs its headquarters from Gigafactory Texas in Travis County. Apple’s Austin campus was planned for 5,000 employees with room for 15,000. Dell is headquartered up the road in Round Rock, Samsung is building a $17 billion fab in Taylor, and Oracle still files from its Austin address while it names Nashville as its future world headquarters. The state government and the University of Texas, with roughly 4,600 faculty and 15,000 staff, are the other side of the payroll.
So the Austin balance sheet has a shape of its own. There is a 401(k) or a TRS, ORP or ERS account. There is company stock, sometimes from two employers, and often a block of options or founder shares whose value depends on an exit that has not happened. There is a house whose appraisal notice has moved a great deal in four years. And there is Austin ISD, which will send $715.5 million of local tax revenue to the state this year under recapture. The plan has to hold all of it at once.
Why it’s complex
Five Austin decisions that reward a written rule
Shares that vest whether or not you were watching
Restricted stock is taxed as wages the day it vests, and the withholding on it is often lower than the household’s actual bracket. After a few grant cycles at Tesla, Apple or Dell, one employer can be the largest position a family owns. We set a sell-at-vest rule and a ceiling for any single stock before the next tranche lands.
Equity compensation and concentrated stockStartup equity: three deadlines with no extension
An 83(b) election on early-exercised or founder shares must reach the IRS within 30 days of the grant. Exercising incentive stock options can trigger alternative minimum tax in a year with no cash to pay it. And qualified small business stock issued after July 4, 2025 can exclude 50%, 75% or 100% of gain at three, four or five years, up to $15 million. Each date is worth a calendar entry.
Executives and equity compensationTRS, ORP or ERS: the public-sector pension question
UT faculty and certain professional staff get 90 days to choose ORP over TRS, and the choice is permanent: TRS takes 8.25% with an 8.25% university match and vests at five years; ORP takes 6.65% with an 8.5% match and vests after a year and a day. State agency employees hired since September 2022 are in ERS’s Group 4 cash-balance plan, a different animal again.
Austin ISD sends $715 million to the state
Austin ISD levies $0.9252 per $100 in 2025 and expects to send $715.5 million to the state this year under Chapter 49 recapture, roughly $8.3 billion since 2000. Recapture does not change your rate or your bill; it changes where the money goes. The exemptions do change the bill: $140,000 off school value, plus the City of Austin’s 20% general exemption and its $204,000 over-65 exemption for 2026.
A house bought at the top is still a house
The city of Austin’s median sale price reached $667,000 in May 2022 and stood at $560,000 in August 2026, about 16% lower. A home bought in 2021 or 2022 may carry less equity than the plan assumed. That matters for the net-worth statement and for a future downsize; it does not have to change the retirement income plan, which runs on the portfolio, not the house.
How much do you need to retire?Sources: U.S. Census Bureau, ACS 2020–2024 5-year estimates and Vintage 2025 city population estimates; Austin ISD, FY2025–26 budget and recapture; Unlock MLS, August 2026 Central Texas Housing Report; Austin Board of REALTORS®, May 2022 report; Travis County, FY2026 taxpayer impact statement; Texas Comptroller, homestead exemptions; Texas Comptroller 2025 city and ISD rate reports; UT Austin HR, retirement programs; ERS, Group 4 cash-balance benefit.
Our approach
One plan across grants, pensions, house and taxes
We begin with the vesting calendar and the pension rules, because they set the timing of everything else, then plan taxes and retirement income around them with property tax as a separate line. A worked example on a home at Austin’s median value of $555,300: the $140,000 exemption lowers the school-taxable value to $415,300, and at Austin ISD’s 2025 rate that is about $3,842 a year for the school portion ($415,300 × $0.9252 / $100). For the city portion, the 20% exemption leaves $444,240, or about $2,550 at the 2025 city rate ($444,240 × $0.574017 / $100).
Write the stock rules down
How much sells at vest, the cap on any one company, the year to exercise options, and whether an 83(b) or a QSBS holding period is in play. Decisions made before the shares arrive are easier to keep.
Settle the pension election
For new UT or state hires, compare TRS, ORP or the ERS cash-balance plan against your expected tenure and the rest of the household’s savings, since the window closes and does not reopen.
Convert stock into income
Sell down concentrated positions across federal brackets, run Roth conversions in the low-income years, file the over-65 school and city exemptions, and time Social Security beside a TRS or ORP payout.
The work
What you’ll work through with us
- RSU sell-at-vest rules and single-stock ceilings for employer shares
- ISO exercise timing and AMT projections before a liquidity event
- 83(b) elections and QSBS holding-period tracking on founder and early-employee stock
- TRS versus ORP analysis for UT faculty and staff; ERS Group 4 for state employees
- Homestead, City of Austin and Travis County over-65 exemption filings
- Roth conversion sizing in the years before required distributions
- Retirement income and Social Security timing alongside a public pension
- Investment management coordinated with your CPA and estate attorney
Planning is led by Theo Halbardier, CFP®, CIMA®, CAIA®, the firm’s founder. We are fee-only: no commissions, no product sales. About Theo
Questions
Common questions from Austin households
Do you have an office in Austin?
We work with Austin households by video and, by arrangement, in person. We do not maintain a public office location.
My RSUs vest every quarter. Should I sell them?
Vested shares are already taxed as wages, so holding them is the same decision as buying the stock with cash that day. Most households we work with set a standing rule: sell a fixed share at each vest and cap the employer at a set percentage of the portfolio. The rule protects against the outcome where the paycheck, the stock and the local housing market all depend on one company.
I have incentive stock options at a company that might go public. When should I exercise?
Earlier exercises can start the clock for long-term capital gains and, for qualifying companies, the QSBS holding period, but exercising ISOs adds the spread to alternative minimum taxable income in that year. We model the exercise in blocks across tax years so the AMT stays payable, and we confirm whether the shares qualify for the Section 1202 exclusion before the exit rather than after.
I just joined UT. TRS or ORP?
There is no do-over, and the deadline is 90 days from eligibility. TRS is a defined-benefit pension: 8.25% from you, 8.25% from UT, vested after five years, with a benefit tied to salary and years of service. ORP is a portable account: 6.65% from you, 8.5% from UT, vested after a year and a day. The comparison turns on how long you expect to stay in Texas public higher education and on what the rest of the household already has in pensions and accounts.
We bought in 2022 and the house is worth less. Does our retirement plan change?
The retirement income plan usually does not, because it is funded by the portfolio and the pension rather than the house. What changes is the balance sheet, and possibly the timing of a downsize or a move. The protest and exemption side is worth attention too: an appraised value that has fallen should show up on the notice, and the over-65 school-tax ceiling locks in at the year you qualify.
What does Austin ISD recapture mean for my tax bill?
Your rate and your bill are set the same way as in any Texas district; recapture applies to what the district collects, not to what you pay. Austin ISD expects to send $715.5 million to the state in 2025–26 because its property values exceed the state’s per-student thresholds. For a homeowner the practical levers remain the homestead exemption, the over-65 exemption and ceiling, and the appraisal protest.
Reviewed by Theo Halbardier, CFP® · Updated September 2026 · Figures current for 2026
Tell us where you are.
The first conversation is 30 minutes. Bring your questions; no preparation needed.
We work with individuals and families across Austin and throughout Texas, meeting by video or in person by arrangement.
Meet with usWe do not maintain a public office at this location; Austin is part of the area we serve. Figures reflect law and published rates as of September 2026 and may change.